<--Back to Wiki Home
A trade fixture is a special kind of object that helps a person run their business. Even though it's attached to a building or land, it's still considered personal property because it's important for the business.
For example, imagine a baker who runs a bakery. They have a large oven attached to the wall that they use to bake bread and pastries. This oven is a trade fixture because it's essential for the baker to run their business. Even though it's attached to the wall, it's still considered the baker's personal property, and they can take it with them if they move to a new location.
"A Deep Dive for Real Estate Agents and Appraisers"
A few more points to keep in mind when it comes to trade fixtures:
Removal: The tenant, who is the business owner, has the right to remove trade fixtures when their lease ends. However, they must repair any damage caused by the removal process. If they fail to remove the fixture before the lease expires, the trade fixture may become the property of the landlord.
Agreement: It's always a good idea for both the landlord and the tenant to have a clear, written agreement that outlines which fixtures are considered trade fixtures. This can help avoid disputes later on.
Improvements vs. Trade Fixtures: Trade fixtures are different from improvements made to the property. Improvements are permanent changes made to the land or building that increase its value, and they typically become the property of the landlord. Trade fixtures, on the other hand, are essential for the tenant's business and remain their personal property.
Financing: In some cases, the value of trade fixtures may be considered when obtaining financing for a business. Lenders might recognize the value of these fixtures and factor it into their lending decisions.
As you prepare for your real estate agent or appraiser exam, it's essential to understand the concept of trade fixtures, as they often play a crucial role in commercial leasing and property management.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
In the world of business, where things can get dizzy,
A trade fixture helps, keeping workers quite busy.
Though it sticks to the land, it's your own, yes indeed,
A must-have possession to help your work succeed.
So, my friend, just remember, when business you're breezin',
A trade fixture's the secret that keeps your work pleasin'.